Clark County Fire District 6’s internal accounting system led to more than $9 million in errors in calculating its liabilities in 2015 and 2016, according to the State Auditor’s Office, which blamed the problems on district staff’s lack of training in the system and knowledge of state reporting requirements.
The errors were ultimately fixed, according to a finding released Tuesday by the auditor’s office, and, according to the fire district, didn’t impact taxpayers.
The auditor’s office regular examination of the district’s financial reporting found a few problems with the fire district’s accounting system, problems that affected the district’s ability to provide reliable financial information.
First, the audit found that the software vendor the district uses for preparing financial statements doesn’t have sufficient understanding of the district’s larger transactions.
Also, the district doesn’t maintain all reporting information in its accounting system, with employee leave balances tracked on another worksheet.
Finally, the district did not notice significant issues with its statements during an internal review, according to the auditor’s office.
Because of those problems, the district overstated its loan and bonds liability by $9.06 million, when it incorrectly recorded a 2017 bond issuance on its 2016 listing of liabilities.
The district also did not include its portion of PERS 1 liability, and understated its liabilities toward the public employee retirement savings plan for 2015 by $121,000, the report said.
By using information from an accounting system that had not been updated, the district also overstated liability for absences by about $200,000 between 2015 and 2016.
District staff, the auditor’s office said, lack the training on the state’s financial reporting requirements and the district’s accounting system to ensure accurate reporting.
District staff were unavailable Tuesday, but in responding to the auditor’s finding, the district wrote that the problems identified by the auditor’s office “consisted solely of errors in the process of reporting financial information.”
Nothing the audit identified adversely impacted, or created any risk, to district taxpayers, the district said.
The district’s internal records of liabilities and leave balances were properly recorded and maintained, the response said, and although the bond liability reporting was in error, the actual bond reporting was correct.
“The cause of the conditions described by the auditor were ministerial rather than substantive and had no substantive adverse impact on the district taxpayers,” the district wrote, adding that it didn’t believe the problems the auditor’s office described rose to the level of a full audit finding.
The auditor’s office recommended the district work with its software vendor to ensure reporting is accurate and complete, and ensure that someone with a comprehensive understanding of the state’s reporting requirements does an independent review of the district’s finances.
The auditor’s office also recommended that the district provide time and resources to train staff responsible for the district’s accounting.
The auditor’s office will review the district’s fixes as part of its next regular audit.
